When a taxpayer makes excess payment of income tax to the government against its actual income tax liability for a given year, the excess amount paid is refunded by the Income tax department after due assessment. This refunded amount is known as “Income tax refund”. You will only receive this income tax refund after the I-T Department processes your ITR and confirms the same via an intimation notice.

Income tax refund can be claimed simply by filing Income Tax Refund. The IT department will process the ITR for refund only if the ITR is verified through any of the online or offline modes of sending a signed copy of ITR V. Further the refund from the IT department is subject to assessment/ verification from the IT department. Refund is received only if the refund claim is found to be valid and legitimate.

Note that when a taxpayer claims a refund in their return of income, the tax department processes such return and the taxpayer would receive an intimation from CPC under section 143(1) which will confirm the amount of refund that the taxpayer is eligible to receive. 

The refund can either match with or it could be higher / lower than what is claimed in the return of income based on assessment done by the income tax department. This refund amount is what the taxpayer would ideally receive from the income tax department.

Income Tax Refund can be claimed when:

• You did not furnish all the investment proofs to your organization. As a result, the amount of taxes deducted by your employer exceeded your actual tax liability for the particular FY. 
• Excess TDS was deducted on your interest income from bank FDs or bonds.
• The advance tax paid by you on self-assessment exceeded your tax liability for the applicable FY as per the regular assessment.
• In case of double taxation

How to check Income Tax Refund status online:

You can check income tax refund status on the National Securities Depository Ltd (NSDL) website, as well as on the Income-tax department’s e-filing portal.

1. On the NSDL website

• Go to the NSDL website to track refund.
• The following web page will appear. Fill in the details, including PAN and AY and click ‘Proceed’.
• Your income tax refund status will be displayed, as depicted in the following image.

2. On e-filing portal:

• Log into the e-filing portal of Income Tax department by clicking here.
• Select View Returns/ Forms.
• Go to ‘My Account’ tab and select ‘Income Tax Returns’. Click submit.
• Click on the acknowledgement number.
• A page showing your return details along with income tax refund status will appear.

Income Tax Refund time:

The refund is usually processed within a month’s time of filing the ITR. After the processing of refund is completed by Centralised Processing Centre (CPC), the refunds are issued within 20 to 45 days. The refunds for taxpayers who are eligible for refunds up to Rs 5 lakh get direct bank credit within a week of refunds being processed.

However, a delay is likely to occur if the taxpayer makes a mistake in filling the ITR. Refunds are withheld if a mismatch occurs in the ITR and the details available with the I-T department. In case of a query, the taxpayer must respond to it quickly. 

In many cases, income tax refunds are not issued or are rejected due to simple mistakes like furnishing incorrect bank account details in the ITR form. In that case, check the bank account details you have mentioned in your ITR.